[21] 

MEMORIAL 

OF 

THE  COMMITTEES  OF  SUNDRY  BANKS 

OF 

THE  CITY  OF  NEW  YORK, 

IN 

OPPOSITION  TO  THE  PASSAGE  OF  THE  BILL 

TO 

INCORPORATE  A  NATIONAL  BANK. 


NOVEMBER  83,  1814. 
Read,  and  ordered  to  lie  on  the  table. 

NOVEMBER  25, 1814. 
Ordered  to  be  printed. 


WASHINGTON: 

A.  &  G.  WAY,  PRINTERS. 
1814. 


Avery  Architectural  and  Fine  Arts  Library 
Gift  of  Seymour  B.  Durst  Old  York  Library 


C«i] 


MEMORIAL. 


To  the  Senate  and  House  of  Representatives  of  the 
United  States  of  America. 

The  memorial  of  the  subscribers,  committees  appointed 
by  five  of  the  banks  in  the  city  of  New  York,  to  take 
into  consideration  all  matters  relating  to  the  state  of 
credit  in  the  city, 

RESPECTFULLY  REPRESENTS.... 

THAT  your  memorialists,  with  great  defer- 
ence to  the  wisdom  of  congress,  presume  that  it  will 
not  he  considered  as  unbecoming  in  them  to  express 
their  opinions  on  a  subject  which  they  have  practi- 
cally under  their  constant  view. 

That  they  see  with  great  alarm  the  proposed  in- 
corporation of  a  bank  of  the  United  States  with  a 
capital  of  fifty  millions  of  dollars ;  not  that  they  are 
insensible  of  the  advantages  of  such  an  institution, 
but  because  they  are  persuaded,  in  their  most  delibe- 
rate view  of  the  subject,  that  the  present  time  is  most 
inauspicious  for  the  creation  of  such  a  bank,  and  that 
so  far  from  aiding  the  fiscal  operations  of  the  go- 
vernment, it  will,  in  their  opinion,  tend  to  embarrass 
still  more,  than  the  adverse  circumstances  of  the 
,  times  have  already  done,  all  public  as  well  as  private 
credit. 

Your  memorialists  firmly  believe, 
That  the  proposed  capital  will  be  found  too  large  : 
That  six  millions  of  dollars  in  specie  cannot  be 
obtained  by  any  inducements  which  can  be  held  out, 
and  that  a  less  sum  will  not  afford  a  proper  security 
to  the  public : 


That  even  if  six  millions  could  be  procured,  the 
payment  of  the  notes  in  specie  could  only  be  continued 
for  a  short  period,  under  the  present  circumstances  of 
the  country : 

That  if,  by  the  exercise  of  the  power  proposed  ta 
be  lodged  in  the  President  of  the  United  States,  the 
notes  are  not  paid  in  specie,  they  will  infallibly  de- 
preciate : 

That  if  they  depreciate,  no  existing  bank  can  pos- 
sibly take  them  without  the  greatest  injury  to  their 
stockholders  : 

That  if  the  notes  are  not  taken  by  the  present 
banks  throughout  the  United  Slates,  they  cannot 
serve  as  a  general  medium  of  circulation. 

A  full  discussion  of  this  subject,  your  memorialists 
are  well  aware,  would  transgress  the  proper  limits  of 
this  memorial :  they  will  therefore  confine  themselves 
to  a  few  of  the  reasons  which  have  induced  them  to 
form  these  opinions.  They  think  that  the  capital 
will  be  found  too  large,  because  the  late  Bank  of  the 
United  States  had  only  a  capital  of  ten  millions  of 
dollars  at  the  period  of  our  greatest  commercial  pros- 
perity, and  since  the  expiration  of  the  charter  of  that 
bank,  the  amount  of  its  capital  has  been  much  more 
than  supplied  by  the  incorporation  of  other  banks.  It 
is  believed  to  have  been  the  opinion  of  the  part  of  the 
community  best  informed  on  that  subject,  that  this 
amount  was  abundantly  sufficient.  Your  memorial- 
ists therefore  cannot  but  dread  the  effects  which  a 
new  banking  capital  of  fifty  millions  must  have  upon 
the  paper  circulation  of  the  country,  particularly  when 
it  is  considered,  that  the  proposed  bank  is  to  be 
pledged  to  lend  to  the  government  thirty  millions, 
Which  the  public  exigencies  will  probably  very  soon 
call  for,  without  any  power  of  refusal  being  left  to 
those  who  are  to  manage  the  bank,  even  if  convinced 
that  tiie  emission  of  so  large  a  sum  in  notes  must  be 
ruinous  to  the  bank  itself. 


[21] 


V 


It  is  well  known  that  a  great  and  constant  drain 
of  the  precious  metals  from  the  United  States  has 
existed  for  a  long  time  past,  while  supplies  of  them 
have  been  cut  off  by  the  war;  and  that  the  alarms 
necessarily  existing  during  a  war,  have  induced  many 
timid  and  cautious  persons  to  hoard  specie,  the  conse- 
quence of  which  has  been  to  render  a  suspension  of 
specie  payments  necessary  to  the  different  banks  in 
Baltimore,  Philadelphia,  New  York,  and  in  various 
other  parts  of  the  United  States  :  notwithstanding  the 
utmost  care  has  been  taken  to  restrain  the  circulation 
of  notes  within  moderate  bounds,  yet  it  has  been  found 
impossible  to  prevent  a  difference  in  value  between 
specie  and  the  notes  of  the  banks  in  the  best  credit, 
This  difference  is  now,  in  the  city  of  New  York,  from 
twelve  to  fifteen  per  cent,  and  in  other  places  still 
greater.  Your  memorialists  have  therefore  no  hesi- 
tation in  giving  it  as  their  opinion  that  six  millions  of 
specie  cannot  be  procured,  but  they  are  persuaded 
also  that,  if  procured,  that  sum  could  not  long  supply 
specie  payments,  because,  as  the  same  causes  are 
likely  still  to  operate,  and  with  increased  effect,  when 
the  paper  circulation  is  so  much  increased  as  it  must 
be  by  the  proposed  loans  to  the  government,  it  is  be- 
lieved that  as  fast  as  the  notes  are  issued  thev  will  be 
returned  for  specie:  as  they  bear  no  interest,  there 
will  be  no  inducement  for  any  person  to  hold  them, 
to  counteract  the  great  advantage  offered  by  the  high 
price  of  specie,  in  sending  them  for  payment. 

If  it  should  Be  found  necessary  to  restrain  the  bank 
from  paying  specie,  your  memoralists  are  convinced 
the  notes  will  depreciate.  The  treasury  notes  which 
have  been  issued  have  done  so,  although  in  much  less 
quantity,  and  under  more  favourable  circumstances, 
because  bearing  interest  and  being  payable  at  definite 
periods.  While  treasury  notes  have  these  obvious 
advantages,  it  is  not  perceived  that  the  notes  of  the  pro- 
posed bank  will  have  any  to  balance  them,  the  secu- 
rity being  presumed  the  same  in  both  cases.  The  ex 


6 


[21] 


peuses  of  the  Avar  must,  in  the  first  instance,  be  paid 
in  these  notes,  and  of  course  they  will  be,  to  a  con- 
siderable extent,  in  the  bauds  of  persons  who  must,  of 
necessity,  dispose  of  them  for  what  they  will  bring. 
The  late  bank  of  the  United  States,  while  redeeming 
its  notes  in  specie  and  possessing  the  entire  support 
of  the  government  and  the  confidence  of  the  public, 
never  had,  it  is  believed,  more  than  six  millions  of 
notes  in  circulation.  The  banks  in  the  city  of  New 
York,  whose  aggregate  capital  is  about  fifteen  millions 
of  dollars,  have  not.  upon  an  average,  had  a  circulation 
of  more  than  five  millions,  although  possessing  all  the 
advantages  to  be  derived  from  the  business  and  sup- 
port of  the  government  in  this  city.  Presuming  that 
the  proportion  of  circulation  to  capital  is  nearly  the 
same  in  other  parts  of  the  United  States,  and  taking 
into  view  that  the  circulation  is  probably  as  great  at 
tiie  present  period  as.  under  the  circumstances  of  the 
country  and  the  removal  of  the  check  of  specie  pay- 
ments, it  can  safely  be,  can  it  be  doubted  what  the  ef- 
fect of  an  additional  emission  even  of  twentv  millions 
of  paper  will  necessarily  be  ? 

As  it  appears  evident  to  your  memorialists  that  the 
notes  of  the  proposed  bank  must  depreciate,  it  ap- 
pears equally  so.  that  no  existing  bank  can  take  them 
without  the  greatest  injury  to  their  stockholders. 
However  disposed  they  may  be  to  aid  the  fiscal  opera- 
tions of  the  government,  yet.  from  the  moment  the 
notes  are  depreciated,  if  they  are  taken  either  in  pay- 
ment or  in  deposits,  ail  their  debts  will  be  paid  in 
that  description  of  paper,  the  circulation  of  their  own 
notes  will  dearly  cease,  and  they  will  be  left  in  posses- 
sion of  notes  redeemable  at  some  future  uncertain 
period  and  bearing  no  present  interest.  Can  such  a 
sacrifice  of  the  interest  of  their  constituents  be  called 
for  or  expected  from  the  present  institutions? 

It  lias  been  supposed  that  the  want  of  a  medium 
of  general  circulation  rendered  a  national  bank  ne- 
cessary :  but  your  memorialists  beg  leave  to  observe, 


[81] 


? 


that  while  they  admit  the  want  of  such  a  medium, 
they  are  quite  persuaded  that  hank  notes  will  not  an- 
swer the  purpose,  unless  they  can  be  exchanged  at 
pleasure  for  specie,  or  are  taken  generally  by  the 
banks  throughout  the  United  States.  If  your  memo- 
rialists are  right  in  the  opinions  already  stated,  it 
appears  to  follow  as  a  necessary  consequence,  that 
the  notes  of  the  proposed  bank  will  not  supply  the 
place  of  a  general  medium. 

As  your  memorialists  are  persuaded  that  the  hest 
interests  of  the  United  States  require  that  the  sus- 
pension of  specie  payments,  which  has  unfortunately 
been  found  necessary,  should  be  continued  for  as 
short  a  period  as  possible,  they  dread  the  increased 
difficulty  which  an  additional  paper  circulation  pro- 
bably of  thirty  or  forty  millions  will  occasion  ;  they 
fear  it  will  approach  to  an  insuperable  bar  to  the  re- 
sumption of  specie  payments ;  while,  on  the  other 
hand,  a  national  bank,  founded  upon  proper  princi- 
ples, and  at  a  more  favorable  period,  when  there  was 
a  reasonable  prospect  of  continuing  to  pay  specie, 
would  oiler  the  best  remedy  for  the  deranged  state  of 
the  circulation,  and  a  most  powerful  instrument  to  re- 
novate the  commercial  credit  of  the  United  States. 

Your  memorialists  beg  the  indulgence  of  congress 
when  they  add,  that  they  have  no  doubt  that  treasury 
bills,  issued  nearly  in  the  way  proposed  by  the  com- 
mittee of  ways  and  means  of  the  house  of  represen- 
tatives, would  be  found  of  more  service  to  the  go- 
vernment, be  much  less  dangerous  to  the  public,  and 
tend  much  more  to  supply  the  want  of  a  general  me- 
dium of  circulation.  They  believe  that  treasury 
notes,  issued  for  various  denominations,  redeemable  at 
the  pleasure  of  the  government,  hut  not  at  any  defi- 
nite periods,  bearing  interest  while  in  circulation  at 
the  present  rate,  but  fundable  at  the  option  of  the 
holder  at  a  higher  rate  of  interest,  would  be  less 
liable  to  depreciation  than  the  notes  of  a  bank  bear- 
ing no  interest  and  the  security  being  the  same.  The 


s 


[si] 


present  interest  on  the  treasury  notes  would  offer  an 
inducement  to  keep  them,  and  whenever  the  market 
was  overcharged,  the  power  to  fund  them  at  a  higher 
rate  of  interest  would  take  off  the  redundance.  In 
this  way  the  issue  of  treasury  notes  would  probably 
operate,  to  a  considerable  amount,  as  a  constant  loan 
at  a  reduced  rate  of  interest ;  nor  should  it  be  over- 
looked that  the  consequences  of  a  depreciation,  if  it 
unfortunately  should  take  place,  would  neither  be  so 
extensive  nor  so  lasting  as  in  the  case  of  a  Bank  of 
the  United  States. 


M.  Clarkson,  Prest. 
Cha  :  Wilkes,  Cashr. 

Rich  :  Varick,  Prest. 
Lynde  Catlin,  Cashr. 

Ama  :  Jackson,  Prest. 
Jno:  Low,  Cashr. 

Wm  :  Bayard,  Prest. 
Jon:  Burrall,  Cashr. 

James  Boggs,  Prest. 
D.  J.  Greene,  Cashr. 


Committee  of  the 
bank  of  Ne  w  York. 

Committee  of  the 
Merchants  Bank. 

Committee  of  the 
Union  Bank. 

Committee  of  the 
Bank  of  America. 

Committee  of  the 
New  York  Manufac- 
turing Company. 


